Local financial lenders have given out more than $30 million in loans to entrepreneurs to start up small business in The Woodlands since 2010, according to the U.S. Small Business Association. Whether it is donut shops, dentists, vet clinics, restaurants or energy support companies, small businesses are finding fertile ground in south Montgomery County.
Efforts to ensure The Woodlands offers a diverse blend in its small business climate are not only being made by local entrepreneurs, but also by a host of entities that have helped establish the community as a leader in small business development.
Among those that help locate, assist and maintain small businesses are The Woodlands Development Company, The Woodlands Area Chamber of Commerce, the Lone Star College Small Business Development Center and the Woodlands Area Economic Development Partnership.
“The very large companies that we have here grab the headlines, so you don’t hear so much from the small businesses, which is the majority of our companies,” said Gil Staley, CEO of The Woodlands Area Economic Development Partnership.
According to the EDP, the average number of employees at a Woodlands business is seven.
“That tells a story in itself,” Staley said. “Small business does have a big presence in our community.”
Small business economics
Among the reasons for the robust climate are an improved economy and banks being more willing to dole out loans, said Manuel Gonzalez, director of the Houston District of the SBA.
“[Lending] terms have become more favorable,” Gonzalez said. “When Wall Street almost crashed, the money got so tight, the banks were not lending. Now the money is flowing again, and I guess everybody is feeling better about themselves and their communities.”
So far in 2013, the Houston district of the U.S. Small Business Association has overseen nearly $500 million locally in small business loans, a figure Gonzalez expects to eclipse a quarter of a billion dollars by the end of the association’s fiscal year.
“The summer months is when we do 40 percent of our volume,” he said. “The weather gets better, people start feeling better about investing, and of course the economy is playing an impact.”
The Woodlands has experienced a recent surge in not only large companies relocating or opening headquarters in the community, but also smaller retail and service businesses who work in support of the large corporations.
“We definitely slowed down during the downturn in retail,” said Rip Reynolds, senior leasing manager for the Howard Hughes Corporation. “We did not have a lot of retail on the ground to lease. Fortunately, our timing has been pretty good, with the planning of Hughes Landing and the planning of the Creekside Park Village Center, which coincided with the upswing out of the economy.”
However, economic factors are not the sole reason The Woodlands is a destination for small businesses. The dynamics of the community itself play a key role, Staley said.
“A lot of small businesses want to be located near their client base, and a lot of our small businesses do business here in The Woodlands,” Staley said. “Retail certainly supports that as well. Restaurants do tremendously well with the added bonus that The Woodlands has a huge daytime population.”
Small business industries
A wide variety of small business industries have found success in The Woodlands, including professional services and office jobs.
“[The Woodlands] lends itself to the service industry, which supports big businesses, such as CPAs, banks and law firms,” Staley said. “Go to any office building and you will see a very good assortment of professional services.”
He said another niche market that has recently developed in The Woodlands area is that of office condominium projects.
Office condominiums are single-story office spaces, typically between 1,200 and 5,000 square feet, that offer similar amenities as many class A offices and are available to lease or purchase.
Staley cited successful projects, such as one on Budde Road, Technology Forest Drive, and another near Sawmill Park Drive, which he said were perfectly suited for small businesses.
The Woodlands Development Company is currently seeking tenants for its two latest projects—Hughes Landing, on the east shore of Lake Woodlands and the Creekside Park Village Center on the southwestern edge of The Woodlands.
Reynolds said each of those projects would command different types of tenants, many of which would be small businesses.
“We have a merchandising plan, and it’s different for a mixed-use project, like a Hughes Landing or Creekside Park,” Reynolds said.
Creekside Park, he said, would likely feature dry cleaners, insurance agents and nail salons.
“You wouldn’t see Tiffany’s back in Creekside Park,” he said.
Both Reynolds and Karen Hoylman, president of The Woodlands Area Chamber of Commerce, said small business owners are increasingly interested in opening restaurants in The Woodlands.
“A local restaurant is the hardest thing to start up,” Hoylman said. “But if your food is really good, then they will make it.”
Hoylman said the chamber visits with many local entrepreneurs looking to open small businesses.
“It’s been steady—from restaurants to retail shops to manufacturing. All sorts of companies have stopped in at the chamber to check out demographic data,” she said.
Small business development
Although the Chamber of Commerce, EDP and Woodlands Development Company are all responsible for bringing, and keeping, successful small businesses to The Woodlands, it is the Lone Star College Small Business Development Center that has played a significant role in getting those businesses off the ground.
While the SBDC is affiliated with the Lone Star College System, it does not provide instruction to students or teach students how to run a business.
Instead, the SBDC provides free business management and consulting services, including helping entrepreneurs with their business plans, market research, money management, and budgeting and loan assistance.
“Small businesses need to have their own CPA, their own attorney and business adviser,” said Sal Mira, director of the SBDC. “We are the business advisers. We tend to round out the advisory team a business owner needs to have.”
The SBDC has six locations in the Greater Houston area, which are also within the Lone Star College System’s Service area: Conroe, The Woodlands, Tomball, Cy-Fair, Kingwood and North Harris County.
The center’s headquarters are in The Woodlands on Research Forest Drive. It was established in 1985 out of a federal grant matching program, and Mira took on his role in 2007.
“In the last six years, we literally have helped thousands of people grow their businesses,” Mira said.
The increase in loan opportunities entrepreneurs are seeing is a result of more favorable business opportunities in the region, he said.
“When you look at Houston compared to rest of the state, it’s an exceptional comparison,” Mira said. “This particular area, state and Greater Houston area is very business friendly compared to other businesses in other states, like California and Ohio. [The business climate] is doing exceptionally well right now.”